50 L.Ed.

2d 12
97 S.Ct. 22
429 U.S. 10

UNITED STATES
v.
Peter POMPONIO et al.
No. 75-1667.
Oct. 12, 1976.

Rehearing Denied Nov. 29, 1976. See 429 U.S. 987, 97 S.Ct. 510.
PER CURIAM.

After a jury trial, respondents were convicted of willfully filing false income
tax returns in violation of 26 U.S.C. 7206(1).1 Based on its reading of United
States v. Bishop, 412 U.S. 346, 93 S.Ct. 2008, 36 L.Ed.2d 941 (1973), the
Court of Appeals held that the jury was incorrectly instructed concerning
willfulness, and remanded for a new trial. 528 F.2d 247 (1975). The United
States petitioned for certiorari. We reverse.

The respondents were charged with falsifying tax returns in two principal ways:
(1) they allegedly caused corporations they controlled to report payments to
them as loans, when they knew the payments were really taxable dividends;
and (2) they allegedly claimed partnership losses as deductions knowing that
the losses were properly attributable to a corporation. Their defense was that
these transactions were correctly reported, or at least that they thought so at the
time.

The jury was instructed that respondents were not guilty of violating 7206(1)
unless they had signed the tax returns knowing them to be false,2 and had done
so willfully. A willful act was defined in the instructions as one done
"voluntarily and intentionally and with the specific intent to do something
which the law forbids, that is to say with (the) bad purpose either to disobey or
to disregard the law." Finally, the jury was instructed that "(g)ood motive alone
is never a defense where the act done or omitted is a crime," and that

consequently motive was irrelevant except as it bore on intent. The Court of

Appeals held this final instruction improper because "the statute at hand
requires a finding of a bad purpose or evil motive." 528 F.2d, at 249. In so
holding, the Court of Appeals incorrectly assumed that the reference to an "evil
motive" in United States v. Bishop, supra, and prior cases meant something
more than the specific intent to violate the law described in the trial judge's
instruction.
4

In Bishop we held that the term "willfully" has the same meaning in the
misdemeanor and felony sections of the Revenue Code, and that it requires
more than a showing of careless disregard for the truth.3 We did not, however,
hold that the term requires proof of any motive other than an intentional
violation of a known legal duty. We explained the meaning of willfulness in
7206 and related statutes:

"The Court, in fact, has recognized that the word 'willfully' in these statutes
generally connotes a voluntary, intentional violation of a known legal duty. It
has formulated the requirement of willfulness as 'bad faith or evil intent,'
(United States v.) Murdock, 290 U.S. (389,) 398, 54 S.Ct. (223), at 226 (78
L.Ed. 381), or 'evil motive and want of justification in view of all the financial
circumstances of the taxpayer,' Spies (v. United States ), 317 U.S. (492,) 498,
63 S.Ct. (364), at 368 (87 L.Ed. 418), or knowledge that the taxpayer 'should
have reported more income than he did.' Sansone (v. United States ), 380 U.S.
(343,) 353, 85 S.Ct. (1004) at 1011 (13 L.Ed.2d 882). See James v. United
States, 366 U.S. 213, 221, 81 S.Ct. 1052, 6 L.Ed.2d 246 (1961); McCarthy v.
United States, 394 U.S. 459, 471, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969)." 412
U.S., at 360, 93 S.Ct., at 2017.

Our references to other formulations of the standard did not modify the
standard set forth in the first sentence of the quoted paragraph. On the contrary,
as the other Courts of Appeals that have considered the question have
recognized, willfulness in this context simply means a voluntary, intentional
violation of a known legal duty. United States v. Pohlman, 522 F.2d 974, 977
(CA8 1975) (en banc), cert. denied, 423 U.S. 1049, 96 S.Ct. 776, 46 L.Ed.2d
638 (1976); United States v. McCorkle, 511 F.2d 482, 484-485 (CA7) (en
banc), cert. denied, 423 U.S. 826, 96 S.Ct. 43, 46 L.Ed.2d 43 (1975); United
States v. Greenlee, 517 F.2d 899, 904 (CA3), cert. denied, 423 U.S. 985, 96
S.Ct. 391, 46 L.Ed.2d 301 (1975); United States v. Hawk, 497 F.2d 365, 366369 (CA9), cert. denied, 419 U.S. 838, 95 S.Ct. 67, 42 L.Ed.2d 65 (1974). The
trial judge in the instant case adequately instructed the jury on willfulness. An
additional instruction on good faith was unnecessary.

As an alternative ground for ordering a new trial, the Court of Appeals held that
respondents were entitled to instructions exonerating them if they believed that
the payments to them were loans and that the losses belonged to the
partnership, 528 F.2d, at 250. Our inspection of the record indicates that such
instructions were given and that they were adequate.4

The respondents' other allegations of error which the Court of Appeals found it
unnecessary to reach should be considered by that court in the first instance.

The petition for certiorari is granted, the judgment of the Court of Appeals is
reversed, and the case is remanded for further proceedings consistent with this
opinion.

10

It is so ordered.

Section 7206 provides in pertinent part

"Any person who
"(1) . . . Willfully makes and subscribes any return, statement, or other
document, which contains or is verified by a written declaration that it is made
under the penalties of perjury, and which he does not believe to be true and
correct as to every material matter . . .
"shall be guilty of a felony . . . ."

We agree with the Court of Appeals that the instructions on this point were
"full and complete." 528 F.2d 247, 249-250 (1975). The jury was told that the
Government contended that respondents "couldn't claim this (the partnership
losses) as a deduction . . . because by so doing they would know that they were
filing a false report of their total gross income." Later the jury was instructed
that, if they found the loans were incorrectly reported, they must also find that
the return was "made willfully and with the specific intent and knowledge at
the time they made it that it was in fact a false return." In explaining intent, the
trial judge said that "(t)o establish the specific intent the Government must
prove that these defendants knowingly did the acts, that is, filing these returns,
knowing that they were false, purposely intending to violate the law." The jury
was told to "bear in mind the sole charge that you have here, and that is the
violation of 7206, the willful making of the false return, and subscribing to it
under perjury, knowing it not to be true and (sic ) to all material respects, and

that and that alone."

3

The Court of Appeals in Bishop held that the evidence under the misdemeanor
statute "need only show unreasonable, capricious, or careless disregard for the
truth or falsity of income tax returns filed." 455 F.2d 612, 615 (CA9 1972).
This Court rejected the view that this lesser degree of culpability was required
for a violation of the misdemeanor statute, and held on the contrary that
"Congress used the word 'willfully' to describe a constant rather than a variable
in the tax penalty formula." 412 U.S., at 359-360, 93 S.Ct. at 2017.

The instructions set forth in n. 2, supra, by requiring knowledge that the returns
falsely reported the transactions, implicitly required knowledge of the true
nature of the transactions. In addition, the jury was instructed with respect to
the loans that "if you do find that they were not bona fide loans then you must
next determine whether or not the defendants knew at the time they were
withdrawing this money that it was not a loan . . . . In other words, you should
determine whether they knew that, and as I have told you, that is an essential
element." With respect to the partnership losses, the jury was told that the
Government claimed that respondents "knew that they couldn't transfer (a
certain asset) to a partnership, and, therefore, when they couldn't transfer it they
couldn't take the benefits of any losses sustained by the partnership in question
. . . ."